Does Banking Competition Improve Industry Performance? Evidence from Taiwan

This paper investigates how the degree of the banking sector competition affects the operating performance of non-banking industrial sectors that are typically dependent on external financing. The empirical analysis adopts the H-statistic competition index proposed by Panzar and Rosse and uses Taiwan’s industry-level and bank-level panel data over the period from 1999:07 to 2013:06. The empirical results find that an increase in the degree of bank competition leads to weaken the industry performance, especially during non-crisis period. Furthermore, such effects may be different, attributive to industry heterogeneity.


Ho-Chyuan Chen, Yu-Ting Chuo, Jui-Chuan Della Chang, Shih-Ti Yu

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